Ulta Beauty Stock Surges After Morgan Stanley Upgrade: Retail’s Elated

Morgan Stanley analyst Simeon Gutman upgraded Ulta Beauty to ‘Overweight’ from ‘Equal Weight'

Shares of Ulta Beauty Inc. (ULTA) surged 4.2% on Tuesday after the company received a ratings upgrade from Morgan Stanely, reviving retail sentiment.

Morgan Stanley analyst Simeon Gutman upgraded Ulta Beauty to ‘Overweight’ from ‘Equal Weight,’ raising the price target from $430 to $500, Fly.com reported.

According ot the analyst, the beauty industry should continue above-average growth in 2025, said the report, adding Ulta's share gains within beauty should improve in 2025 from its 2024 bottom. The analyst sees sees potential for earnings and valuation upside as Ulta’s sales and margins expectations were ‘reasonable’ for 2025.

Sentiment on Stocktwits turned ‘extremely bullish’ compared to ‘neutral’ a day ago. Message volumes rose to ‘high’ from ‘normal.'

The company recently raised its fourth quarter outlook, reflecting stronger-than-expected performance during the holiday season. It also named Kecia Steelman as its new CEO, replacing Dave Kimbell.

Based on sales performance quarter-to-date, the company now expects comparable sales will increase modestly and operating margin will be above the high-end of the company’s previous expected range of 11.6% to 12.4% of sales for the fourth quarter of fiscal 2024.

The company plans to report financial results for the fourth quarter and fiscal 2024 on March 13, 2025. 

Ulta Beauty, a retailer of cosmetics, fragrance, skincare ad hair care products, has more than 1,437 retail stores across 50 states.

Ulta stock is down 2.94% year-to-date.

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